Dejban Law




Are Consumer Rights At Risk With Trump Presidency?

The movement towards banning mandatory arbitration clauses from consumer contracts [including broadband, satellite and cellular service contracts] will be heading into a time of uncertainty as the new Trump administration takes office next week.   Although proponents of arbitration clauses have argued that such provisions are beneficial in that they allow quicker resolution of disputes for consumers, they fail to acknowledge the pitfalls of such a provision and process as well as the constitutional implications that it raises.  

Such arbitration provisions are mandatory, which means a consumer has no choice but to accept the terms otherwise they will not get the service.  So while it would make sense for a consumer to be able to choose to arbitrate rather than pursue a claim in court, forcing a consumer to waive their right to a jury trial, a right that must be preserved under the 7th Amendment, is a violation of a consumers constitutional rights.  Furthermore, in most cases companies choose and pay the fee of the arbitrator which provides an incentive for the arbitrators to rule in favor of the company in order to get their business again.

The Federal Communications Commission has begun to take notice of these issues and on December 19, 2016 Commissioner Mignon Clyburn released her #Solutions2020 Call to Action Plan which included eliminating forced arbitration clauses in contracts for telecommunications services.  Public comment on the Commissioners plan was due by January 11, 2017.  On January 11th, a number of privacy groups joined together to submit their comments related to the issue of forced arbitration. Specifically, the group encouraged the Federal Communications Commission to prohibit forced arbitration clauses in any services contracts in industries under their umbrella.   Their comments highlighted how prevalent this issue is by noting that 99.9% of all wireless subscribers have arbitration clauses in their contracts.

At a time when the pendulum is swaying in favor of consumers right to choose how to deal with their disputes, only time will tell whether the new administration will impact its trajectory in the opposite direction and continue protecting business interests over consumer interests.